UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001
NEW MILLENIUM DEVELOPMENT GROUP
(a development stage company)
(FORMERLY WHATSUPMUSIC.COM, INC.)
(FORMERLY ANGELAUDIO.COM INC.)
(FORMERLY CORE SYSTEMS, INC.)
(Exact name of small business issuer as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
88-0390251
(I.R.S. Employer Identification Number)
Suite 1200
1130 West Pender Street
Vancouver, British Columbia
V6E 4A4
(Address of principal executive offices)
(604)642-6435
(Issuer's telephone number)
Transitional Small Business Disclosure Format (check one): Yes [ ] No [ X ]
Item 1:
The company is continuing to develop its core CD manufacturing business.
The growth of the company is progressing at a slow rate due to continued
difficulties in capital funding. However we are optimistic that this will soon
change. the company is exploring the potential of adding a new division in the
arena of telecommunications but is still in the early stage of researching this
idea.
NEW MILLENIUM DEVELOPMENT GROUP
(a development stage company)
(formerly Whatsupmusic.com Inc.)
(formerly Angelaudio.com Inc.)
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in US Dollars)
JUNE 30, 2001
(UNAUDITED)
NEW MILLENIUM DEVELOPMENT GROUP
(formerly Whatsupmusic.com Inc.) (formerly Angelaudio.com Inc.)
(a development stage company)
INTERIM CONSOLIDATED BALANCE SHEET (US Dollars)
JUNE 30, 2001 AND 2000
(UNAUDITED)
2001 2000
--------------- ---------------
ASSETS
CURRENT ASSETS
Cash $ 5,010 $ 375,522
Accounts receivable 4,759 8,646
Loan receivable (Note 4) 21,421 -
Deposits and prepaid expenses 34,756 65,680
--------------- ---------------
65,946 449,848
CAPITAL ASSETS (Note 5) 190,719 279,687
GOODWILL (net of amortization of $55,686) (Note 2) 174,742 220,600
--------------- ---------------
$ 431,407 $ 950,135
=============== ===============
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 68,455 $ 98,893
Loans payable (Note 6) 373,447 162,740
Due to related parties (Note 7) 129,432 178,558
--------------- ---------------
571,334 440,191
LONG TERM DEBT (Note 8) 37,898 35,555
--------------- ---------------
609,232 475,746
--------------- ---------------
STOCKHOLDERS' EQUITY
COMMON STOCK
Authorized 50,000,000 common shares par value of $0.001
Issued 9,295,300 common shares (Note 9) 9,295 9,295
PAID IN CAPITAL 802,005 802,005
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE (989,125) (336,911)
--------------- ---------------
(177,825) 474,389
--------------- ---------------
$ 431,407 $ 950,135
=============== ===============
SUBSEQUENT EVENT (Note 10)
APPROVED BY THE DIRECTOR:
"Ian Stuart"
---------------------------------------
NEW MILLENIUM DEVELOPMENT GROUP
(formerly Whatsupmusic.com Inc.) (formerly Angelaudio.com Inc.)
(a development stage company)
INTERIM CONSOLIDATED STATEMENT OF OPERATIONS (US Dollars)
(UNAUDITED)
For the nine months ended
Cumulative from inception June 30,
February 19, 1997 to ---------------------------------------
June 30, 2001 2001 2000
------------------------- ---------------- -----------------
Sales $ 53,641 $ 49,841 $ -
Cost of sales 24,402 18,884 -
--------------- ------------- ------------
-
29,239 30,957
--------------- ------------- ------------
GENERAL AND ADMINISTRATIVE EXPENSES
Accounting and audit 49,623 23,042 22,517
Advertising and promotion 50,178 1,310 31,711
Amortization 152,411 86,286 23,926
Bank charges and interest 27,698 13,487 961
Consulting 180,537 74,468 71,742
Foreign exchange (22,253) (23,091) 4,371
Filing fees 18,506 2,824 -
Legal 47,456 43,458 1,768
Licences 57,700 6,000 12,529
Loss on disposal of leasseholds 7,746 7,746 -
Marketing 14,220 6,810 17,461
Office and miscellaneous 77,290 29,957 19,145
Rent 42,222 24,908 5,356
Salaries and benefits 208,781 92,689 59,592
Travel 106,249 5,570 58,165
--------------- ------------- ------------
1,018,364 395,464 329,244
--------------- ------------- ------------
LOSS FOR THE PERIOD $ 989,125 $ 364,507 $ 329,244
=============== ============= ============
LOSS PER SHARE $ (0.15) $ (0.04) $ (0.06)
=============== ============= ============
WEIGHTED AVERAGE SHARES OUTSTANDING
6,403,429 9,295,300 5,141,444
=============== ============= ============
NEW MILLENIUM DEVELOPMENT GROUP
(formerly Whatsupmusic.com Inc.) (formerly Angelaudio.com Inc.)
(a development stage company)
INTERIM CONSOLIDATED STATEMENT OF CHANGES
IN STOCKHOLDERS' EQUITY (US Dollars)
FOR THE PERIOD ENDED JUNE 30, 2001
(UNAUDITED)
Additional
Common Paid in Accumulated
Shares Amount Capital Deficit
--------------- ---------------- ---------------- ----------------
Balance, September 30, 1998
- $ - $ - $ -
March, 1999 stock issued for services
20,000 20 1,980 -
March, 1999 changed par value from no
par value to $0.001 -
- - -
April, 1999 shares issued for cash 73,000 73 7,227 -
April, 1999 forward stock split 32
for 1 2,976,000 2,976 (2,976) -
Net loss year ended September 30, 1999 - - - (7,667)
--------------- ---------------- ----------------- ----------------
Balance September 30, 1999 3,069,000 3,069 6,231 (7,667)
February, 2000 forward stock split
1.7 for 1 2,148,300 2,148 (2,148) -
March, 2000 stock cancelled (1,122,000) (1,122) 1,122 -
April, 2000 stock issued for
acquisition of subsidiary 2,000,000 2,000 - -
May, 2000 stock issued pursuant to a
private placement 3,200,000 3,200 796,800 -
Net loss for year ended September 30,
2000 - - - (616,951)
--------------- ---------------- ----------------- ----------------
Balance September 30, 2000 9,295,300 9,295 802,005 (624,618)
Net loss for nine months ended June
30, 2001 - - - (364,507)
--------------- ---------------- ----------------- ----------------
Balance June 30, 2001 9,295,300 $ 9,295 $ 802,005 $ (989,125)
=============== ================ ================= ================
NEW MILLENIUM DEVELOPMENT GROUP
(formerly Whatsupmusic.com Inc.) (formerly Angelaudio.com Inc.)
(a development stage company)
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (US Dollars)
(UNAUDITED)
For the nine months ended
Cumulative from inception June 30,
February 19, 1997 to --------------------------------------
June 30, 2001 2001 2000
------------------------- ----------------- ----------------
OPERATING ACTIVITIES
Loss for the period $ (989,125) $ (324,507) $ (329,244)
Add: Amortization 152,411 86,286 23,926
Issue of stock for services 2,000 - -
Loss on disposal of leaseholds 7,746 7,746 -
Changes in non-cash working capital (21,554) (5,859) (23,515)
---------------- ------------- ------------
(848,522) (236,334) (328,833)
---------------- ------------- ------------
FINANCING ACTIVITIES
Issue of share capital 6,249 - 3,200
Lease inducement 21,707 - -
Paid in capital 801,051 - 796,800
Advances from related parties 188,329 103,549 55,653
---------------- ------------- ------------
1,017,336 103,549 855,653
---------------- ------------- ------------
INVESTING ACTIVITIES
Cash received on acquisition of subsidiary 5,984 - 5,984
Disposal (acquisition) of capital assets (169,788) 20,415 (158,915)
---------------- ------------- ------------
(163,804) 20,415 (152,931)
---------------- ------------- ------------
INCREASE (DECREASE) IN CASH 5,010 (112,370) 373,889
CASH, beginning of period - 117,380 1,633
---------------- ------------- ------------
CASH, end of period $ 5,010 $ 5,010 $ 375,522
================ ============= ============
Non-cash investing and financing activity (Note 2)
NEW MILLENIUM DEVELOPMENT GROUP
(formerly Whatsupmusic.com Inc.) (formerly Angelaudio.com Inc.)
(a development stage company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (US Dollars)
JUNE 30, 2001 AND 2000
(UNAUDITED)
1. MANAGEMENT'S OPINION
In the opinion of management, the accompanying consolidated
financial statements contain all adjustments necessary to present
fairly the financial position of the Company as of June 30, 2001,
and the results of operations then ended, and the changes in cash
for the period then ended.
For US reporting requirements, the accompanying consolidated
financial statements have been adjusted as of June 30, 2001 as
required by item 310 (b) of Regulation S-B to include all
adjustments which in the opinion of management are necessary in
order to make the financial statements not misleading.
2. INCORPORATION AND NATURE OF OPERATIONS
The Company was incorporated on February 19, 1997 under the laws of
the State of Nevada, USA as Core Systems, Inc. and changed its name
to Angelaudio.com Inc. in April, 2000. In November, 2000, the
Company changed its name to Whatsupmusic.com Inc. In June, 2001, the
Company changed its name to New Millenium Development Group (see
Subsequent Events - Note 10).
On April 15, 2000, the Company acquired all the issued and
outstanding shares of Angelaudio.com Inc., a private company
incorporated under the laws of the state of Nevada, USA in return
for the issuance of 2,000,000 common shares out of the treasury of
the company, having a par value of $2,000. Angelaudio.com Inc.
subsequently changed its name to Angelaudio Systems Inc. (ASI).
The acquisition has been accounted for using the purchase method
with the results of operations of ASI included in the consolidated
financial statements from the date of acquisition.
These consolidated financial statements reflect the purchase of net
assets at April 15, 2000 as follows:
Current assets $ 28,386
Capital assets 144,699
Goodwill 228,428
Current liabilities and loans payable (364,308)
Long term debt (35,205)
----------------
Total consideration funded by
issuance of 2,000,000 shares $ 2,000
================
NEW MILLENIUM DEVELOPMENT GROUP
(formerly Whatsupmusic.com Inc.) (formerly Angelaudio.com Inc.)
(a development stage company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (US Dollars)
JUNE 30, 2001 AND 2000
(UNAUDITED)
3. SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of presentation
The financial statements have been prepared in accordance
with generally accepted accounting principles on a going
concern basis, which presume the realization of assets and
discharge of liabilities in the normal course of business for
the foreseeable future. The company's ability to continue as
a going concern is dependent upon achieving profitable
operations and upon obtaining additional financing. The
outcome of these matters cannot be predicted at this time.
These financial statements do not include any adjustments to
the amounts and classification of assets and liabilities that
might be necessary should the company be unable to continue
in business.
Because of the speculative nature of the company, there are
significant risks which are summarized as follows:
the company is newly formed with no operating history and
minimal assets; and the company has limited funds
available for acquisition or operations.
For US reporting requirements, the company is considered to
be in the development stage as defined in Statement of
Financial Accounting Standards No. 7.
(b) Capital assets
Capital assets are recorded at cost and are amortized at the
following annual rates:
Computer hardware 30% declining balance
Computer software 50% declining balance
Office furniture and equipment 20% declining balance
Website design 30% declining balance
(c) Translation of foreign currencies
Amounts recorded in foreign currencies have been translated
into United States dollars as follows:
Current monetary assets and liabilities are translated
at the rates prevailing at the balance sheet date.
Fixed assets and shareholder equity accounts are
translated at the rates prevailing on the transaction
dates.
Deferred expenditures, income and expenses are
translated at the average rate for the period.
Any gain or loss on translation of foreign currencies is
included in net income.
(d) Cash and equivalents
For the purpose of the statement of cash flows, all
investments with a maturity of three months or less are
considered to be cash equivalents. There were no cash
equivalents as of June 30, 2001.
NEW MILLENIUM DEVELOPMENT GROUP
(formerly Whatsupmusic.com Inc.) (formerly Angelaudio.com Inc.)
(a development stage company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (US Dollars)
JUNE 30, 2001 AND 2000
(UNAUDITED)
3. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(e) Leasehold inducements
The benefits arising from lease inducements are taken into
income over the term of the lease on a straight-line basis.
(f) Financial instruments
All significant assets, financial liabilities and equity
instruments of the company are either recognized or disclosed
in the financial statements together with available
information for a reasonable assessment of future cash flows,
interest rate risk and credit risk.
(g) Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amount of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements, and the
reported amounts of revenues and expenditures during the
reporting period. Actual results could differ from those
reported.
(h) Goodwill
Goodwill is amortized on a straight line basis over a period
of five years.
(i) Revenue recognition
The Company is in the business of selling music over the
internet through their website www.whatsupmusic.com. The
Company signs contracts with recording artists specifying the
selling price of each song and the royalty to the artist,
after direct costs. Revenue will be recognized at the time an
order is placed, music is downloaded, there are no
uncertainties regarding product acceptance, there are no
significant vendor obligations, the fees are fixed and
determinable and collection is considered probable.
(j) Income taxes
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes".
A deferred tax asset or liability is recorded for all
temporary differences between financial and tax reporting.
Deferred tax expense (benefit) results from the net change
during the year of deferred tax assets and liabilities.
(k) Stock based compensation
SFAS 123 "Accounting for stock based compensation", defines a
fair value based method of accounting for employee stock
options. Under this fair value method, compensation cost is
measured at the date of grant based on the fair value of the
award and is recognized over the vesting period. However SFAS
123 allows an entity to continue to measure compensation
costs related to stock option costs in accordance with
Accounting Principle Board Statement No. 25 (APB 25). The
Company has elected to measure compensation related to stock
options in accordance with APB 25. Accordingly, since the
fair value of the shares was less than the price of the stock
options at the date of grant, there is no compensation to be
recognized under US GAAP.
NEW MILLENIUM DEVELOPMENT GROUP
(formerly Whatsupmusic.com Inc.) (formerly Angelaudio.com Inc.)
(a development stage company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (US Dollars)
JUNE 30, 2001 AND 2000
(UNAUDITED)
3. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(l) Comprehensive income
In June 1997, the FASB issued SFAS No. 130 "Reporting
comprehensive income". SFAS 130 requires that total
comprehensive income and comprehensive income per share be
disclosed with equal prominence as net income and net income
per share. Comprehensive income is defined as changes in
shareholders' equity exclusive of transactions with owners
such as capital contributions and dividends. Under SFAS 130,
the Company has no material comprehensive income items other
than the net loss in any of the years presented.
4. LOAN RECEIVABLE
Loan receivable from an officer of the Company bears interest at
7.5% per annum, with no specific terms of repayment.
5. CAPITAL ASSETS
2001 2000
--------------------------------------------------- ------------
Accumulated Net Book Net Book
Cost Amortization Value Value
------------- -------------- -------------- -------------
Computer hardware $ 215,600 $ 71,312 $ 144,288 $ 217,653
Computer software 5,747 2,979 2,768 5,358
Office furniture and
equipment 16,790 3,827 12,963 11,542
Web site design 45,928 15,228 30,700 37,224
Leasehold improvements - - - 7,910
------------- ------------- ------------- ------------
$ 284,065 $ 93,346 $ 190,719 $ 279,687
============= ============= ============= ============
6. LOANS PAYBLE
2001 2000
------------- ------------
Promissory note payable to an officer, bears interest
at 10% per annum compounded annually and maturing
March 1, 2001 $ 152,296 $ 88,000
Loan payable to officers, non-interest bearing and
with no specific terms of repayment 221,151 74,740
------------- ------------
$ 373,447 $ 162,740
============= ============
NEW MILLENIUM DEVELOPMENT GROUP
(formerly Whatsupmusic.com Inc.) (formerly Angelaudio.com Inc.)
(a development stage company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (US Dollars)
JUNE 30, 2001 AND 2000
(UNAUDITED)
7. DUE TO RELATED PARTIES
Amounts due to related parties are non-interest bearing and have no
specific terms of repayment.
8. LONG TERM DEBT
2001 2000
----------- ---------
Note payable to two officers with no specific term of
repayment and bearing interest at 8% per annum $ 37,898 $ 35,555
=========== ==========
9. SHARE CAPITAL
(a) Stock options
As at June 30, 2001, options were outstanding for the
purchase of common shares as follows:
Number of Shares Expiry Date Price per Share
------------------- --------------- -------------------
750,000 May 1, 2002 $ 1.00
1,250,000 May 1, 2005 $ 1.00
(b) Warrants
At the period end 3,200,000 share purchase warrants were
outstanding. Each warrant entitles the holder to purchase one
common share of the Company at an exercise price of $0.25,
expiring March 15, 2002.
10. SUBSEQUENT EVENT
On July 2, 2001, the Company agreed to acquire 100% of New
Millenium Development Group, Inc. (NMDG-FL), a private Florida
corporation, in exchange for 25,071,580 shares of common stock of
the company. The transaction was the result of arms'-length
negotiation between the Company and the principal shareholders of
NMDG-FL.
NMDG-FL is involved globally in the digitized telecommunications
and data industry.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: August 28, 2001
NEW MILLENIUM DEVELOPMENT GROUP
By: /s/ Riz Alikhan
--------------------
Riz Alikhan
Chief Executive Officer